With the demonetisation, small businesses are finding it very difficult to sail through their daily operations. Primarily because it’s almost impossible for them to get hold of enough 100 Rupee notes to return as change to their customers, or their customers to have enough of the same currency to pay for the smaller amounts. Most of the small businesses are proprietor-owned and are managed by just an individual, which implies that exchanging their money or withdrawing it would require them to shut their businesses for the greater part of the day, which again would result in loss. The economic activity has definitely seen a drop in this sector in the past few days.

Though, in order for them to get the cash flow going, they would have to take out time, but, on the other hand, there are several measures whereby they can gradually think of moving to a cashless way of going about their business.

As we all know, for any small business, payments are utmost important. Listed below are a few ‘non-cash’ options which can help these small businesses reach this transformation.

Net Banking/Account Transfers

One of the most common and convenient options for the business owners (and also their customers), to receive payments is Net Banking.

There are three services available for such a kind of transfer:

National Electronic Funds Transfer (NEFT)

Real-time Gross Settlement (RTGS)

Immediate Payment Service (IMPS)

In NEFT, the money gets transferred to another bank account during bank working hours, in hourly batches. NEFT transactions can cost somewhere between Rs. 5 and Rs. 25, depending on the value of the amount transferred.

RTGS is done for high-value transactions, starting at Rs. 2 Lac. They can cost somewhere between Rs. 30 to Rs. 55, depending on the value of the amount transferred.

The facility of IMPS is available 24*7, and one can transfer the money instantly. The maximum amount one can transfer through IMPS is Rs. 2 Lac. This kind of transaction can cost somewhere between Rs. 5 to Rs. 15, depending on the value of the amount transferred.

Cheques/Demand Drafts

If not internet banking, another way to receive payments is through cheques or demand drafts. In this case, both the business owners as well as the customers need to have bank accounts. The biggest difference between the two is that cheques bring along the baggage of a credit risk. While a cheque is issued by the customer, a demand draft is issued by a Bank. In a demand draft there is guaranteed payment by the banker and there is no question of it bouncing, whereas a cheque can bounce as a result of insufficient funds. Cheque payments are made after presenting the cheques to the bank, while Demand Drafts are given after making payments to the bank.

Plastic Money

There are three types of plastic cards available:

Credit Card

Debit Card

Prepaid Card

Credit cards are issued by banks and other entities. Debit cards are issued by the banks and they are linked to your bank account. Prepaid cards are a viable alternative to cash and cheques and they can be issued by both banks and other private partners.

One does not require any bank account to use these Prepaid cards, though almost every bank these days also offers prepaid cards. They are very similar to the prepaid mobile phone cards. All you got to do is buy a card and load it with the desired amount and the card will be ready for use.

Unified Payments Interface (UPI)

A bank account, a registered mobile number, and the UPI-enabled app on his/her Android smartphone, is what is required to use this facility. UPI allows easier, real-time transfer of money between bank accounts, with the use of smartphones. It allows a customer to pay directly to different merchants, both online and offline, without the hassle of typing any card details, IFSC codes or net banking or e-wallet passwords.

e-Wallets

E- Wallets are online prepaid accounts where one can store money, to be used as and when required. E-Wallet sites generally have a few easy steps for users to get started. One is not required to enter their debit/credit card details for every online transaction, thus making it an easier option. Most sites do not even have a minimum amount. A person can load just the amount they require for buying something and complete the transaction. Most E-Wallets provide opportunities to the users to save with their cashback offers. It has become a popular alternative payment option. You can pass on the benefits of your E-Wallet even to your friends or family.

Some of the popular E-Wallets are:

https://paytm.com/

https://www.payumoney.com

https://www.oxigenwallet.com/virtuale-prepaid-visa-cards

https://www.mobikwik.com/

http://www.citruspay.com/

https://wallet.masterpass.com/Wallet/CitibankIndia/en-in/

https://www.sbi.co.in/buddy/

https://www.jio.com/en-in/apps/jio-money

Payment Gateways/Payment Solution Providers

Payment gateways or payment solution providers are services which authorise electronic payments like credit cards, debit cards, online banking or cash cards. They act as a middleman between a bank and a merchant’s website or their mobile application. Each time a user attempts to make a payment, the merchant’s website sends an encrypted card information to the payment gateway. The validity of the details is then confirmed with the bank, by the payment gateway, and thereafter the money gets transferred to the merchant’s account, from the user’s account.

There is a definite need of a secure payment gateway solution for merchants/ businesses/ small owners. A good payment gateway system offers secure and smooth payment transactions thus resulting in higher sales.

Below listed are a few payment gateway solution providers in India–

https://www.instamojo.com/

https://www.payubiz.in/

http://www.citruspay.com/

https://www.ccavenue.com/

https://www.paypal.com/

https://razorpay.com/

Custom packages in round figures

For those who can apply this to their businesses, lucky them! One major problem that people are facing these days is the fact that though standing in long queues are giving them the 2K notes, but not many have adequate change to return to the customer on every transaction. It is in such situations where having custom packages in round figures act as a great measure to avoid the need for change.

The Desi Method – Book Keeping

In the current ‘cashless’ setup, where people are either out of cash or are out of change, the age old method of maintaining books or bahi khaata, as we Indians call it, comes across as one convenient way for small businesses to receive payments. This kind of a setup works well when the customer is an old one and also reliable. This step relies on the trust factor, more than anything else.

Of late, the small and medium business owners were becoming more and more aware of the avenues of a digital and cashless economy, but it’s just that since the transition wasn’t imposed on them, they were taking their own time to make the switch. But now, with demonetisation in its full swing, this transition to the digital domain has become critical. A digital economy means more accountable transactions, covering both the business owner and the customer.

These initial days might seem difficult and the change might have come our way quite unexpectedly, but as the famous saying rightly goes, “The secret of change is to focus all your energy, not fighting the old, but on building the new”, so let us welcome this change and contribute our bit towards building a corruption free, digital India.